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The Difference Between Storage and Tankless Water Heaters
The Difference Between Storage and Tankless Water Heaters
Updated over 6 months ago

Thinking of going tankless, but you don’t quite understand the difference between storage tanks and tankless? Let us help!

Below, you will find information on the traditional storage tank that we’ve all become so accustomed to and information on tankless water heaters, how they work, and their benefits.

How a Storage Water Heater Works

The traditional tank water heater heats and stores water for home appliances and fixtures.

  • Function: It converts energy to heat and transfers that heat to water. It connects to a cold-water supply pipe and has an outgoing hot water pipe that supplies heated water to faucets and appliances.

  • Fuel Types: Mostly natural gas, but propane and electric water heaters are also common. Natural gas is usually less expensive than electricity.

  • Gas-Fueled Heaters: Heat water with a burner beneath the tank. A thermostat regulates fuel delivery to the burner, which is ignited by a pilot light or spark ignition. A vent collects and expels toxic emissions.

  • Pressure and Flow: The tank is under pressure, so hot water exits through the top outlet. Cold water enters through a diffuser dip tube at the bottom.

  • Corrosion Protection: An anode rod minimizes water’s corrosive elements, extending the tank's life.

    Maintenance: The drain valve is used for flushing sediment. The temperature-pressure (TP) relief valve opens automatically if temperature or pressure exceeds safe levels.

  • Electric Heaters: Use a heavy electrical cable to deliver energy to heating elements. They don't require a vent and usually have one or two heating elements controlled by separate thermostats.

How a Tankless Water Heater Works

A tankless water heater heats water as it’s needed for the home and for appliances.

  • Function: Heats water directly without a storage tank. When a hot water tap is turned on, cold water travels through a pipe into the unit where a gas burner or electric element heats it.

  • Efficiency: Tankless water heaters deliver a constant supply of hot water without standby energy losses, saving money.

  • Energy Savings: For homes using 41 gallons or less of hot water daily, tankless water heaters can be 24% - 34% more energy-efficient. For homes using around 86 gallons per day, energy savings can be 27% - 50% if a demand water heater is installed at each hot water outlet.

  • Cost and Longevity: The initial costs are higher, but they last longer (over 20 years) and have lower operating costs. Replaceable parts extend their life further. In contrast, storage water heaters last 10-15 years.

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